Reed Cavendish Wealth Management - US Increases Oil Drilling Activity

TAIPEI, Taiwan, November 20, 2018 (Newswire.com) - In October this year, oil prices reached a peak of nearly $90 per barrel but analysts at Reed Cavendish Wealth management say prices have since declined by around 20 percent causing some market speculators to conclude that oil may have hit a bottom.

Although oil prices increased by 1 percent earlier this week as OPEC, led by member Saudi Arabia, pushed to implement supply cuts of up to 1.4 million barrels per day from the beginning of next month, Reed Cavendish Wealth Management analysts say investors remain cautious.

Although OPEC is trying to push through production cuts in an effort to counteract reduced demand and prevent an oversupply problem, the United States has been steadily increasing its production of crude and US-based energy firms have been adding additional oil rigs throughout this year.

The current total number of U.S. oil rigs in operation now stands at 888, a number not seen since early 2015. Higher drilling activity will lead to an increase in U.S. crude production which Reed Cavendish Wealth Management analysts say has already reached record highs this year.

Reed Cavendish Wealth Management analysts believe investors may have good reason to be wary, as crude prices are still far below the peaks reached in early October this year. In spite of some gains seen earlier this week, Reed Cavendish Wealth Management analysts say the market is under pressure from increasing supply and waning demand.

As some of the world’s biggest oil consumers find themselves with better alternative energy options, such as wind and solar both of which are rapidly becoming more cost-effective, demand for oil could decline significantly in the long run.

Source: Reed Cavendish Wealth Management